April 16 (Bloomberg) -- Federal Reserve Bank of Cleveland President Sandra Pianalto said a government report showing employers added 120,000 workers in March, the fewest in five months, underscores the choppy nature of the U.S. expansion.

“Recent labor market data provide an example of the uneven pattern of economic activity,” Pianalto, a voting member on the policy-setting Federal Open Market Committee, said today in a speech in Lexington, Kentucky. “Monthly ups and downs like these make it hard to confirm the underlying pace of job creation.”

The Federal Open Market Committee plans to meet April 24-25 to debate policy for an economy described as growing at a “modest to moderate” pace in the Fed’s Beige Book survey released last week. Pianalto spoke after a report today showed retail sales rising more than forecast in March, as consumers weathered a jump in gasoline prices.

The Standard & Poor’s 500 Index fell 0.2 percent, following the biggest weekly decline in 2012, as a drop in Apple Inc. shares overshadowed optimism about the economy after the increase in retail sales. The S&P 500 fell to 1,367.77 at 12:44 p.m. New York time.

Pianalto highlighted data showing recent strength in the labor market, including a decline in new claims for unemployment insurance and a faster rate of employment increases in the first quarter of 2012 compared with the fourth quarter of 2011.

‘Modest Pace’

“It seems as though the labor market is still improving, albeit at a modest pace,” Pianalto said at “A Day with the Commissioner” sponsored by the Kentucky Department of Financial Institutions.

“The good news is that the economy is displaying forward momentum,” she said. “The banking industry is healthier than it has been in several years. Much of the harm caused by the severe recession is being repaired.”

“If our economy were a Kentucky thoroughbred, I’d say we have moved from a walk to a trot, but we’re far from a gallop,” she said.

Retail sales rose 0.8 percent following a 1 percent advance in February, Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for an increase of 0.3 percent.

The central bank has pledged to hold interest rates near zero through at least late 2014. New York Fed President William C. Dudley defended that date last week, citing a possible surge in oil prices or a worsening of the debt crisis in Europe as risks to the economic outlook.

Pianalto, 57, has been president of the Cleveland Fed since 2003 and first joined the regional bank in 1983 as an economist in the research department.

--Editors: James Tyson, Gail DeGeorge

To contact the reporter on this story: Joshua Zumbrun in Lexington, Kentucky at jzumbrun@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net